Ireland now included on US Treasury's 'monitored list'

Ireland makes the US Treasury list because of the size of our trade surplus with the US and our current account surplus

Ireland has been included on the US Treasury Department's "monitored list" of countries for the first time.

The Treasury Department said countries on this list require close attention in relation to their "currency practices and macroeconomic policies".

The updated list also includes other European Union member states including Italy and Germany.

The Treasury has established several criteria for a country to be included on the list and Ireland now meets two of these criteria, including the size of our trade surplus with the US and our current account surplus.

Ireland ran a current account surplus amounting to 8.5% of GDP in 2017, above the Treasury's 2% threshold. The surplus in 2018 was 9.1% of GDP.

In a statement, the Finance Department said it has been well documented that the Irish current account is heavily distorted by factors such as "contract manufacturing" and the on-shoring of intellectual property assets.

The Finance Department also noted that Ireland has consistently run a goods trade surplus with the US.

Exports - mainly pharmaceucial products - from Ireland to the US amounted to €39 billion last year, while imports from the US amounted to €16 billion - mainly imports of aircraft by Irish-based aircraft leasing companies.

As a result, Ireland ran a merchandise trade surplus of €23 billion with the US in 2018.

The Minister for Finance and for Public Expenditure and Reform said that while Ireland runs a large goods trade surplus with the US, the country simultaneously run a large services trade deficit.

Paschal Donohoe said the latest data show a broadly balanced trade position when both goods and services are taken into account.

He also said the economy is deeply embedded in global supply chains as the Irish economy is a very open economy - this is especially evident in the country's trade with the US, where the two countries have integrated and complex supply chains.

"Ireland and the US have a mutually advantageous economic bilateral relationship which can be measured by US foreign direct investment into Ireland, and Irish investment in the US," Mr Donohoe said.

US-owned firms employ around 150,000 people in Ireland while Irish-owned firms employ around 100,000 people in the US.

The Minister said that US Commerce Department figures show that Ireland is the eighth largest source of foreign direct investment to the US with the top three sectors Software/ICT, Business Services and Food and Beverages.

The Finance Minister also said that the country's highly skilled, flexible workforce and its location between mainland Europe and the US have long made it an attractive proposition for American companies looking to establish a European presence.

He said that multinational companies locating in Ireland, including from the US, gain financial benefits which supports their worldwide operations.

"At the same time there are over 500 Irish owned companies exporting to US, around two-thirds of these having a full-time presence in the US, ranging from a single person sales office to manufacturing operations with thousands of employees," Mr Donohoe said.

Irish companies, therefore, make a sizeable contribution to the US economy, he added.

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